Often, when researching trend-following strategies such as moving averages or turtle trading, the author makes explicit note of how the strategy is only viable in bullish market conditions. I also hear this same nugget of wisdom repeated on Reddit, and I was wondering if anyone could enlighten me as to why.
Surely most strategies would perform equally well by taking short positions in a bear market?
If market conditions are relatively flat, then I can see how trend following could be ineffective. However, even in this case, would it not be possible to simply trade on a shorter timescale? If an asset has enough volatility in a given timeframe to cover the brokerage fees, then surely there's still money to be had following the swings, even if the asset returns are stationary over a longer timescale?
And finally I'd appreciate someone telling me why I'm a fucking moron for considering this approach in the first place.
All the best!
Submitted November 02, 2020 at 08:01AM by hollammi